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on Economics of Happiness |
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Issue of 2025–09–01
seven papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Nguyen, Ha; Mitrou, Francis |
| Abstract: | The catastrophic effects of natural disasters on social and economic systems are well documented; however, their impacts on individual life satisfaction remain insufficiently understood. This study pioneers a causal analysis of the effects of cyclones on life satisfaction in Australia, leveraging local cyclone exposure as a natural experiment. Drawing on more than two decades of nationally representative panel data, individual fixed-effects models reveal that only the most severe Category 5 events—particularly those occurring in close proximity to residences—significantly reduce overall life satisfaction, as well as satisfaction with community and health. Notably, these severe cyclones exhibit either lasting or delayed adverse effects on satisfaction with employment opportunities, neighbourhood, community, and personal safety. The findings are robust across a range of sensitivity checks, including a falsification test confirming no effect of future cyclones on current life satisfaction, and three randomization tests. Furthermore, these negative impacts are more pronounced among males, younger individuals, and those without prior residential insurance coverage. |
| Keywords: | Natural Disasters; Life Satisfaction; Happiness; Wellbeing; Australia |
| JEL: | I12 I31 Q5 Q51 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125390 |
| By: | Balleer, Almut; Hirsch, Michael; Nöller, Marvin |
| Abstract: | We present evidence that air pollution negatively affects current well-being. To do so, we create a new dataset, matching particulate matter concentration at the exact day and location with individual-level survey responses about current life satisfaction. The panel structure of our data allows us to overcome several identification challenges in the literature. Additionally, we show how aggregation of air pollution across time and space mis-measures the relevant exposure. Our results further suggest that air pollution affects current well-being mostly through negative emotions like sadness or worry. We estimate the willingness to pay for clean air that refers to the direct, immediate effects of air pollution and can be mapped well to economic models. |
| Abstract: | Luftverschmutzung beeinflusst das aktuelle Wohlbefinden negativ. Wir zeigen dies anhand eines neuen Datensatzes, in dem wir die Feinstaubkonzentration an einem bestimmten Tag und Ort mit individuellen Umfrageantworten zur aktuellen Lebenszufriedenheit abgleichen. Dank der Panelstruktur unserer Daten können wir hierbei mehrere Identifikationsprobleme aus der Literatur überwinden. Wir zeigen zudem, wie die Aggregation von Luftverschmutzung über Zeit und Raum zu einer falschen Messung der relevanten Belastung führt. Unsere Ergebnisse deuten darauf hin, dass Luftverschmutzung das aktuelle Wohlbefinden vor allem durch negative Emotionen wie Traurigkeit oder Sorgen beeinflusst. Darüber hinaus schätzen wir die kurzfristige Zahlungsbereitschaft für saubere Luft, die gut in ökonomische Modelle überführt werden kann. |
| Keywords: | Subjective well-being, air pollution, willingness to pay, compensating variation |
| JEL: | H41 I31 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:324660 |
| By: | Christophe Salvat (CGGG - Centre Gilles-Gaston Granger - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Since 2012, the United Nations has published the World Happiness Report (WHR) each year, ranking countries based on the level of happiness reported by their inhabitants. This article aims to present the main findings and shortcomings of this type of survey, as well as of happiness economics more broadly. Particular attention is given to the historical evolution of how happiness has been taken into account in political and economic thought, and to the challenges posed by the measurement of subjective well-being. After examining the main limitations of self-assessment questionnaires—especially the so-called Cantril ladder used in the WHR—and analyzing some of the anomalies observed in the rankings in recent years, I conclude that, despite their interest, using such rankings as a basis for public decision-making—or even as a simple social benchmark—can prove to be as risky as it is counterproductive. |
| Abstract: | Chaque année depuis 2012, l'ONU publie le Rapport mondial sur le bonheur (World Happiness Report, WHR), qui classe les pays en fonction du niveau de bonheur déclaré par leurs habitants. Cet article vise à présenter les principaux enseignements et faiblesses de ce type d'enquête, ainsi que de l'économie du bonheur en général. Une attention particulière est accordée à l'évolution historique de la prise en compte du bonheur dans la réflexion politique et économique, ainsi qu'aux défis posés par la mesure du bien-être subjectif. Après avoir examiné les principales limitations des questionnaires d'auto-évaluation, notamment celui de l'échelle dite de Cantril utilisée dans le WHR, et analysé certaines anomalies observées dans ce classement ces dernières années, je conclus que, malgré leur intérêt, utiliser de tels classements comme base pour la prise de décisions publiques -ou même comme simple repère social -peut s'avérer aussi risqué que contreproductif. |
| Keywords: | Cantril ladder, happiness, happiness studies, GDP, Easterlin paradox, PIB, paradoxe d'Easterlin, échelle de Cantril Happiness, science du bonheur, Bonheur |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-05162824 |
| By: | Slater, Giulia; Sarracino, Francesco |
| Abstract: | Individuals’ attempts to defend from the deterioration of common goods, such as natural and social capital, stimulate defensive growth, that is new economic activity driven by private solutions to collective problems. In this paper, we provide a first estimate of the value of defensive expenditures, that is of the individual consumption needed to protect subjective well-being against collective problems. We conduct a regression analysis of life satisfaction on aggregate consumption levels and various social and environmental externalities (which we refer to as "bads"). Using a compensating differentials approach, we estimate the monetary valuation of social and environmental disruption for which no market price exists. Our estimates indicate that the consumption needed to defend against collective problems is worth nearly a quarter of actual individual consumption. In terms of national income, this is equivalent to nearly half Gross Domestic Product per capita in affluent economies. Defensive consumption stimulates economic growth, however, in so far as the equivalent of nearly half of growth is defensive, its expansion does not reflect true progress. |
| Keywords: | subjective well-being, quality of life, defensive consumption, defensive growth, compensating differentials, shadow value, willingness to accept |
| JEL: | I3 I31 O10 P0 Q50 Q51 |
| Date: | 2025–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125372 |
| By: | Livia Bartolomei (UMR Innovation - Innovation et Développement dans l'Agriculture et l'Alimentation - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Genowefa Blundo Canto (UMR Innovation - Innovation et Développement dans l'Agriculture et l'Alimentation - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Pasquale de Muro (ROMA TRE - Università degli Studi Roma Tre = Roma Tre University) |
| Abstract: | A shift in how to measure well-being using more appropriate and coherent indicators has been long called for. Nonetheless, monetary indicators, such as income and GDP, or utilitarian frameworks, remain the most common approaches used. The capability approach (CA) has been advocated as an alternative framework to measure well-being. This paper aims to capture the state-of-the-art of how the CA has been applied to assess or characterise the well-being impacts of project-based development interventions in Global South countries. The ultimate goal is to discuss whether the CA provides more varied and complex indicators of well-being and therefore more comprehensive impact assessments. The results highlight that qualitative and participatory approaches are frequently applied methods to assess individual capabilities, most often related to educational, economic, social and empowerment dimensions. Capabilities linked to environmental and recreational activities, as well as collective capabilities, were significantly overlooked. Quantitative approaches to impact evaluation were less frequently used. This paper provides a first systematic review on the use of the CA to assess well-being impacts. Future applications of the CA could focus on better integration of qualitative and quantitative approaches for robust impact assessments and targeting understudied capabilities. |
| Keywords: | approche participative, évaluation de l'impact, bien-être social, bien-être, indicateur social, indicateur de développement, pays en développement, développement socioéconomique, Impact evaluation, Poverty, Capabilities, Outcomes, Human development |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05182245 |
| By: | Caspar Kaiser; Anthony Lepinteur |
| Abstract: | Economists routinely use survey measures of, for example, risk preferences, trust, political attitudes, or wellbeing. The literature generally treats numerical response categories as if they represent equal psychological intervals. We provide the first systematic test of this assumption, developing a general framework to quantify how easily results can be overturned when this linearity assumption is relaxed. Using original experimental data, we show that respondents interpret survey scales in ways that do deviate from linearity, but only mildly. Focusing on wellbeing research, we then replicate 30, 000+ coefficient estimates across more than 80 papers published in top economics journals. Replicated coefficient signs are remarkably robust to mild departures from linear scale-use. However, statistical inference and estimates of relative effect magnitudes become unreliable, even under modest departures from linearity. This is especially problematic for policy applications. We show that these concerns generalise to many other widely used survey-based constructs. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.16440 |
| By: | Sarracino, Francesco; Slater, Giulia |
| Abstract: | Nearly one hundred years ago, John M. Keynes envisioned a future where material concerns would fade, allowing individuals to focus on leisure and well-being. Similar expectations were common in Keynes' days, when industrial progress promised to yield productivity gains, which would increase wages and lift workers out of poverty. Freed from material constraints, individuals would devote more attention to personal interests, relationships, and quality of life. One hundred years later, history proved that Keynes was right about economic growth, but individuals remain focused on material concerns at the expense of quality of life and of the environment. Why did economic activity deliver affluent, but socially and environmentally unsustainable societies? What possibilities are there for our future, the one of our grandchildren? In this article, we first review the evidence on the unsustainability of the current economic model. We discuss the role of economic growth for well-being, providing new evidence on defensive consumption, and illustrating a new explanation of unsustainability. We then discuss Neo-humanism, an evidence-based narrative to promote sustainable quality of life, ensures thriving lives in socially and environmentally sustainable societies. A shift towards sustainable quality of life is possible thanks to the insights from decades of research in this field. |
| Keywords: | neo-humanism, subjective well-being, post-growth, sustainability, social capital, quality of life, defensive growth, beyond GDP |
| JEL: | I00 I3 I31 O10 P0 Q50 |
| Date: | 2025–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125369 |